NEWMARKET COURT FILE NO.: FC-12-40585 DATE: 20220309 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Stavros Tsagaris Applicant – and – Georgia Kolovos Respondent
Nikan Barari, for the Applicant Geoffrey Wells, for the Respondent
HEARD: Written Submissions
DECISION AS TO COSTS
F. Graham J.:
The Issue
[1] Mr. Tsagaris seeks an order for costs of $34,184 (all inclusive) for a family law trial on the basis that he was the more successful party.
[2] His legal fees for the trial were approximately $21,666 (all inclusive), comprised of about $10,000 paid to his first trial counsel and $11,666 owing to Legal Aid Ontario (LAO) for the services of his second trial counsel. Additionally, his second trial counsel put in seventy-two hours of preparation beyond the maximum preparation time permitted by LAO.
[3] Ms. Kolovos seeks an order for partial indemnity costs of $86,785 (all inclusive) on the basis that she was the more successful party.
[4] She submits that her legal fees for full indemnity costs were $140,139 (all inclusive). Her counsel’s Bill of Costs, however, starts in January 2012, almost six years before the commencement of the trial. Roughly $50,000 (all inclusive) was billed for services rendered prior to mid-March 2017 when trial preparation is first mentioned in her counsel’s dockets. Thereafter, about $10,000 (all inclusive) was billed for services rendered on motions and conferences for which costs was either addressed or not reserved. The amount billed by her counsel for the trial management conference in July 2017, trial preparation, and trial attendances at court was about $80,000 (all inclusive).
The History of the Trial
[5] The focus of the trial was decision-making responsibility and parenting time. In addition, the evidence informed a concurrent uncontested trial about property equalization, child support, and special expenses for the children. Mr. Tsagaris’ pleadings on the financial issues were struck before trial due to non-disclosure.
[6] Ms. Kolovos succeeded in obtaining a final order for property equalization that required her to pay Mr. Tsagaris $34,336. She failed, however, to obtain an order for child support or special expenses for the children. The court’s judgment on the financial issues was given by way of an unpublished endorsement dated August 10, 2018.
[7] Ms. Kolovos also succeeded in obtaining a final order for sole decision-making responsibility and some incidents thereto. Mr. Tsagaris had sought joint decision-making. The court’s judgment on this issue, released on July 31, 2020, is at 2020 ONSC 4672.
[8] The most challenging issue at trial was parenting time. Mr. Tsagaris has an acquired brain injury (ABI) that presents a significant challenge for unsupervised parenting time. Nevertheless, he sought unsupervised and equal parenting time. Initially, Ms. Kolovos sought a final order that Mr. Tsagaris would continue to have parenting time supervised at a professional parenting time supervision agency that had been working with the family prior to trial, until supervision in the community, including his parents’ home, was appropriate.
[9] After four days of trial, the court declined to make a final order with respect to parenting time. The court was troubled that, for no apparent reason, the children stopped seeing their father prior to trial, which was significant given that the supervision agency’s policy was not to force a child to see a parent. The court was concerned that if a final order was made as suggested by Ms. Kolovos, the children might not see their father again, which was neither party’s position at that time. Nor was the court persuaded that equal parenting time would be in the children’s best interests.
[10] As a result, the court recommended a parenting professional to work with the parties and the children. The parties agreed, but, unfortunately, that effort did not succeed. So, in early 2018, the parties agreed to work with the initial supervision agency again. That effort broke down in May 2018.
[11] In early 2019, the parties agreed to work with another parenting professional. They worked with her until her professional relationship with Mr. Tsagaris broke down in August 2019.
[12] In September 2019, Ms. Kolovos changed her position about parenting time; she sought a final order terminating parenting time by Mr. Tsagaris. Mr. Tsagaris continued to seek unsupervised and equal parenting time.
[13] In the July 31, 2020 judgment, the court decided that a final order terminating Mr. Tsagaris’ parenting time was not appropriate at that time because it was likely that someone in the home Ms. Kolovos and the children shared with Ms. Kolovos’ parents had been influencing the children against their father. The court decided that the children deserved their father having another opportunity to address his parenting challenges. The court established a detailed plan for Mr. Tsagaris and the children to engage with additional professional assistance.
[14] On November 15, 2021, the court heard further viva voce evidence. On November 16, 2021, the parties settled parenting time on a final basis and the court accepted the settlement.
[15] The final consent order provides that Mr. Tsagaris shall have two hours of in person parenting time per week supervised by one his siblings or a spouse of one of his siblings. In addition, he shall have thirty minutes of virtual parenting time per week supervised in the same manner. In addition, he shall have three hours of in person parenting time at Christmas, Orthodox Easter, and Father’s Day, supervised in the same manner.
[16] There are also terms about make up parenting time, transportation of the children, and a prohibition of discussion of adult matters in the presence of the children.
Family Law Rule 18 – Special Offers to Settle
[17] Rule 18 provides that, unless a court orders otherwise, a party who serves a written offer, signed by the party and the party’s counsel (if any), upon the other party (or counsel), at least seven days before a trial date, that is not withdrawn and does not expire before the trial starts, and is not accepted, is entitled to full costs from the date the offer was served if the party obtains an order at trial that is as favourable or more favourable than the offer.
[18] Rule 18 (16) provides that when a court exercises its discretion over costs, it may take into account any written offer to settle, the date it was made and its terms, even if the requirements of the paragraph above are not met.
[19] In this case, both parties served written offers to settle on November 21, 2017.
[20] Given that the trial started the same day, neither offer was served at least seven days before the trial started which made the offers ineligible under Rule 18.
[21] Furthermore, Mr. Tsagaris’ non-severable offer stipulated joint decision-making responsibility and unsupervised weekend parenting time. Accordingly, Mr. Tsagaris’ offer was not as favourable as or more favourable than the final order.
[22] Similarly, Ms. Kolovos’ non-severable offer stipulated that Mr. Tsagaris would have parenting time supervised at the initial agency “until the children are ready to graduate to supervised access visits in the community including the Applicant’s parents’ home.” No criteria were given for that determination. Moreover, given the agency’s policy of not forcing a child to see a parent, it is unlikely that his parenting time would have progressed. In effect, given that the children were refusing to see their father, it is likely that this term would have resulted in a de facto termination of Mr. Tsagaris’ parenting time. Accordingly, Ms. Kolovos’ offer was not as favourable as or more favourable than the final order.
[23] Both parties also served written offers to settle in early November 2021.
[24] Given that the trial commenced almost four years previously, however, neither offer was served at least seven days before the trial started which made the offers ineligible under Rule 18.
[25] Furthermore, Mr. Tsagaris’ non-severable offer stipulated three hours of in person supervised parenting time per week, and twenty minutes of virtual supervised parenting time five times per week. Accordingly, his offer was not as favourable or more favourable than the final order.
[26] On the other hand, Ms. Kolovos’ non-severable offer was almost identical to the final order. The only significant difference was the stipulation of make up time for any parenting time missed due to Ms. Kolovos being on vacation. That term benefits both parties. The effect is that the parenting time schedule does not prevent Ms. Kolovos from taking vacations of more than seven days in duration and Mr. Tsagaris is entitled to make up time if she does. Accordingly, Ms. Kolovos’ offer was as favourable as or more favourable than the final order.
Family Law Rule 24 and Costs Generally
[27] Rule 24 (1) provides that there is a presumption that successful party is entitled to costs.
[28] Rule 24 (4) provides that a successful party who has behaved unreasonably during a case may be deprived of all or part of the party’s own costs or ordered to pay all or part of the unsuccessful party’s costs.
[29] Rule 24 (5) provides that in deciding whether a party has behaved reasonably or unreasonably during a case, the court shall examine the party’s behaviour in relation to the issues from the time they arose, including whether the party made an offer to settle, the reasonableness of any offer the party made, and any offer the party withdrew or failed to accept.
[30] Rule 24 (6) provides that if success in a step in a case is divided, the court may apportion costs as appropriate.
[31] Rule 24 (8) provides that if a party has acted in bad faith, the court shall decide costs on a full recovery basis and shall order the party to pay them immediately.
[32] Rule 24 (12) provides that in settling the amount of costs, the court shall consider,
(a) the reasonableness and proportionality of each of the following factors as it relates to the importance and complexity of the issues: (i) each party’s behaviour, (ii) the time spent by each party, (iii) any written offers to settle, including offers that do not meet the requirements of rule 18, (iv) any legal fees, including the number of lawyers and their rates, (v) any expert witness fees, including the number of experts and their rates, (vi) any other expenses properly paid or payable; and (b) any other relevant matter.
[33] The Ontario Court of Appeal stated in Serra v. Serra, 2009 ONCA 395, that the costs rules are intended to promote three fundamental goals: to partially indemnify successful litigants for the cost of litigation, to encourage settlement, and to discourage and sanction inappropriate behaviour by litigants. The Court of Appeal added in Mattina v. Mattina, 2018 ONCA 867, that a fourth goal is to ensure that cases are dealt with justly, as stipulated in Family Law Rule 2 (2).
[34] These four goals and Rules 18 and 24 guide the court in determining a proportional, fair, just, and reasonable amount that should be paid for costs in this case.
The Financial Issues
[35] Although Ms. Kolovos succeeded on property equalization, she did not succeed on child support and the children’s special expenses. Thus, the parties had mixed success on the financial issues.
Decision-making Responsibility
[36] Ms. Kolovos succeeded on this important issue. Mr. Tsagaris did not. Nor did he make an offer to settle that was close to the final order on this issue. Ms. Kolovos made an offer in 2017 with this stipulation – but the offer was non-severable with other terms that were not met.
Parenting Time
[37] Leaving aside for the moment the November 2021 offers to settle, neither party succeeded on the important and complex issue of parenting time.
[38] Mr. Tsagaris did not obtain a final order for unsupervised or equal parenting time. Ms. Kolovos did not obtain a final order for supervision at the initial agency, followed, when “the children [were] ready to graduate”, by supervision in the community. Nor did she obtain a final order terminating Mr. Tsagaris’ parenting time.
[39] The final settlement was fairly close to Mr. Tsagaris’ non-severable offer made a few days earlier and almost identical to Ms. Kolovos’ non-severable offer made about two weeks earlier.
Other Considerations
[40] Mr. Tsagaris behaved unreasonably before and during the litigation. He threatened, harassed, and assaulted Ms. Kolovos before the trial started. He did not comply with his financial disclosure obligations which resulted in his pleadings on financial issues being struck. Although these behaviours were likely the result of his ABI, they were, nevertheless, unreasonable.
[41] In addition, his 2017 offer to settle was unreasonable, although he likely did not realize that due to his ABI. On the other hand, his 2021 offer to settle was reasonable.
[42] Ms. Kolovos likely permitted the children to be negatively influenced by someone residing in her household. Although she likely did not realize how important it was for her to prevent that negative influence, it was unreasonable for her to have permitted it. On the other hand, she acted reasonably by trying to facilitate the children seeing their father, even while she was seeking to terminate his parenting time.
[43] Although her 2017 offer to settle was not reasonable, her 2021 offer was reasonable.
[44] The court finds that counsel spent an appropriate period of time preparing for court appearances given their different levels of experience and hourly rates. Their time spent was proportional to the importance and complexity of the issues.
[45] Mr. Tsagaris’ only income is a Canada Pension Plan (CPP) disability payment from which a deduction of over $400 per month is paid to Ms. Kolovos for the benefit of the children. As a result, Mr. Tsagaris’ monthly income from CPP is less than $700 per month. He lives with his parents. He is likely permanently unemployable due to his ABI. He owes LAO $11,666.
[46] Ms. Kolovos is also in a challenging financial position. She works part time as a hairstylist and lives with her parents.
[47] The parties jointly owned a matrimonial home on the date of separation. The home was sold and the proceeds were placed into trust. Ms. Kolovos has received her share of the proceeds after equalization. The remaining balance, about $109,500, belongs to Mr. Tsagaris but is being held as security for costs.
Synthesis
[48] The parties had mixed success on the financial issues.
[49] Ms. Kolovos was successful with respect to the important issue of decision-making responsibility and incidents thereto.
[50] Neither party’s 2017 offer to settle fell within Rule 18. Both 2017 offers were non-severable and significant terms were not met.
[51] Neither party succeeded with respect to their positions at trial regarding the important and complex issue of parenting time. Their 2017 offers were not reasonable with respect to parenting time.
[52] Mr. Tsagaris’ 2021 offer was fairly close to the parenting time settlement; Ms. Kolovos’ offer was almost identical to the settlement. Neither were eligible under Rule 18.
[53] Both parties acted unreasonably to some degree. Mr. Tsagaris’ unreasonable behaviour was likely due to his ABI. Ms. Kolovos’ unreasonable behaviour was likely due to not fully understanding that the negative influences on the children’s relationships with their father were likely harmful to the children. On the other hand, Ms. Kolovos acted reasonably in attempting to facilitate parenting time for Mr. Tsagaris.
[54] Counsel spent a reasonable amount of time and billed a reasonable amount for trial preparation and attending court during the trial.
[55] The court finds that no costs are appropriate for the financial issues given the parties’ mixed success.
[56] The court finds that trial preparation and trial court attendances prior to July 31, 2020 related equally to the issues of decision-making responsibility and parenting time. After that, the only remaining issue was parenting time.
[57] The court finds that a just, fair, proportional, and reasonable result in these circumstances is for Ms. Kolovos to receive substantial recovery on the decision-making responsibility issue and some recovery on the parenting time issue. Accordingly, Mr. Tsagaris’ claim for costs is dismissed.
[58] Mr. Tsagaris is ordered to pay Ms. Kolovos costs in the amount of $40,000 (all inclusive).
[59] Accordingly, Mr. Huckins (or the current trustee of the matrimonial home proceeds) is ordered to disburse $40,000 to Mr. Wells in trust forthwith.
[60] Mr. Huckins (or the current trustee of the matrimonial home proceeds) is ordered to disburse the remaining funds, less any fees due to the trustee, to Ms. Barari in trust forthwith thereafter.